Court Suspends ‘Amazon Tax’ For Now

I haven’t seen this break on the big media sites yet, so I’ll reproduce a media release I just received as-is. I have not had time to check out the claims or the decision. For background, see my post from last year.

State House Majority Leader Amy Stephens, R-Monument, today is praising a court ruling by the U.S. District Court of Colorado that has granted a preliminary injunction against enforcing, House Bill 10-1193, the controversial tax on online retailers, such as Amazon.com, and on Colorado consumers.

In a decision issued late yesterday afternoon, the court ruled that the law shall not be enforced due to violations of the Commerce Clause of the United States Constitution while litigation continues.

“House Republicans have questioned the constitutionality, and the rationale, of this online tax since it was introduced,” Stephens said. “We knew from the beginning that this tax placed an undue burden on businesses and consumers across Colorado, and the nation.”

The law is being challenged by the Direct Marketing Association as unconstitutional. In addition to Commerce Clause concerns, the DMA has repeatedly cited privacy issues arising from the requirement that companies turn over confidential purchasing history information to the Colorado Department of Revenue.

“The decision by the court should be applauded,” Stephens said. “Unfortunately, this tax proposal was rushed through the legislature, causing concern for consumers and leading to the immediate loss of Colorado jobs.”

The law mandated online retailers to start collecting use tax, or to provide information about online purchases made in Colorado in order for the state to collect taxes on the transactions. Passage of the law led to an Amazon.com decision to end their association with 4200 Colorado marketing associates.

“A full repeal of the Amazon tax is still necessary,” Stephens said. “This court ruling is just one step in the long process of repealing this unconstitutional tax. I am hopeful that with this most recent decision, along with a full repeal by the legislature, we will see these jobs return to Colorado.”